Global food commodity prices see sharpest rise in 18 months, FAO reports

GLOBAL – Global food commodity prices experienced their steepest increase in 18 months during September, driven by notable rises in key commodities, particularly sugar, according to the Food and Agriculture Organization (FAO) of the United Nations. 

The FAO Food Price Index, which tracks the monthly changes in international prices of a basket of widely traded food commodities, averaged 124.4 points in September, marking a 3.0 percent rise from August and a 2.1 percent increase from the same period last year. 

Sugar prices led the surge, with the sugar price index jumping by 10.4 percent.  

This spike was driven by concerns over worsening crop conditions in Brazil, the world’s largest sugar producer, and uncertainty surrounding India’s decision to allow more sugarcane to be diverted for ethanol production. These factors contributed to fears of reduced sugar export availability from India, a key global supplier. 

Cereal prices also rose significantly in September, with the cereal price index increasing by 3.0 percent.  

Wheat and maize prices were the main contributors to this rise. International wheat prices were influenced by concerns over excessively wet conditions in key producing regions such as Canada and the European Union.  

However, competitively priced supplies from the Black Sea region partly mitigated the upward pressure.  

Maize prices, on the other hand, were affected by logistical challenges, including low water levels on key transportation routes in Brazil and the United States. 

In contrast, the FAO All Rice Price Index saw a slight decline of 0.7 percent, reflecting relatively quiet trading activity in global rice markets. 

The vegetable oil price index climbed by 4.6 percent, with prices for palm, soy, sunflower, and rapeseed oils all increasing.  

Lower-than-expected production in Southeast Asia contributed to the rise in palm oil prices, while soyoil prices were supported by lower-than-anticipated crushings in the United States. 

Dairy prices also rose, with the dairy price index up 3.8 percent in September. Quotations for whole milk powder, skim milk powder, butter, and cheese all saw gains. 

The meat price index edged up by 0.4 percent, driven primarily by higher prices for poultry meat due to strong demand for Brazilian products. Prices for bovine and pig meat remained stable, while those for ovine meat declined slightly. 

In its latest Cereal Supply and Demand Brief, FAO raised its global cereal production forecast for 2024 to 2,853 million tonnes, reflecting upward revisions to rice and wheat output, which offset a small reduction in global coarse grains production.  

However, the revised figure remains slightly below the record output of 2023. 

The FAO also predicted a 0.4 percent increase in global cereal utilization for 2024/25 and a 1.2 percent rise in global cereal stocks, with rice stocks growing at a faster pace. 

Global cereal trade, however, is expected to contract by 2.7 percent in 2024/25, although rising imports from Africa and the Near East could drive a recovery in international rice trade by 2025. 

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE